Uganda: Attorney General Advises Against Auditing UTL

The attorney general William Byaruhanga has advised that there cannot be an audit of the administrator's activities in Uganda Telecom Limited (UTL) until when the administration process elapses.

According to a letter addressed to the minister of Finance, Byaruhanga says the administrator Bemanya Twebaze is only bound to make reports on the progress of administration to the creditors of the company and furnish copies to court, the official receiver and the registrar of companies.

The latest communication comes at the backdrop of tantrums by state minister for Investment Evelyn Anite stating that the government has encountered considerable difficulty dealing with the administrator and completely lost confidence in his ability to continue serving the role.

In a letter dated June 26, Anite directed the attorney general to apply to the court for orders replacing Bemanya as the administrator of UTL. On Friday, deputy attorney general Mwesigwa Rukutana disregarded the directive, saying that the minister has no supervisory powers over the administrator.

Rukutana explained that the grounds to remove an administrator must relate to failure to comply with the duties imposed on the administrator under the Administration Deed, the Insolvency Act or any other law or any orders and directions of court adding that he had not found any fault on the part of the administrator that warrants his removal.

Rukutana further faulted Anite's quest for Bemanya's removal on grounds that it undermines a ruling by the speaker of parliament Rebecca Kadaga, who, clearly stated that administration is a court-controlled process and that neither the legislature nor the executive should interfere.

But moments after Rukutana's opinion, Anite stated that the response points to a confirmation of a view that Bemanya is a "crooked lawyer" entrenched in the Attorney General's Office. She said that a cartel in sections of government, is keen to have UTL liquidated and sell to themselves the strategic assets of the company.

She further instructed the attorney general to apply to the court to replace him, regardless of the advice of the deputy attorney general. But in a letter dated July 1, Byaruhanga maintained the position of his deputy and reaffirmed that the audit cannot happen when the office of the auditor-general declined to conduct the audit.

According to the letter, a request to audit was rejected on grounds that since the company is under administration, a court-controlled process, this may potentially pose legal challenges.

"Therefore, it is my view that during the period of administration the progress of the process can be ascertained from the reports furnished to the above-named parties under the law. However, I am of the view that an audit of the administrator's activities can only be undertaken upon conclusion of the process which in this instance expires on November 22, 2019," reads the letter.

Byaruhanga adds that the Office of the Auditor General is not supposed to work under directions or control of any person or authority. He further advises that the minister may choose to request them to pursue this option only if there is evidence that the administrator is not complying with his duties or as ordered by court.

Bemanya was appointed administrator of UTL following the exit of Ucom Limited, a Libyan owned firm that owned 69 per cent shares in March 2017. He entered into an Administration Deed and the shareholders ceded.

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